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- Correction of inverted duty structure for capital goods.
- More allocation of funds towards UDAY scheme which was not so effective in its earlier phase. Bringing in a new UDAY phase 2 with stricter guidelines and improved controls.
- Continued allocation for Dedicated Fright Corridors and related allocation in order to speed up the completion of projects.
- Allocation of more budget for Railways for completing the target of 100% electrification by 2022
FMCG AND CONSUMER DISCRETIONARY
- Cut in personal income tax rates to provide more disposable income in the hands of the consumer.
- Bail outs or continued measures to ease stress on NBFCs to help revival of the unorganized sector.
- Relief packages to ease the burden on stressed sectors such as agriculture, automobile, aviation, telecom, real estate, etc., which indirectly will aid in demand for discretionary and non-discretionary products
- We expect the government to extend tax sops for SEZ units by another 5 years. If not, at
- least to keep the SEZs noticed till date outside the purview of the new laws
- Companies are seeking relief on 20% tax rate on share buybacks announced in Budget 2019
- Amend dividend tax laws such that tax is levied in the hands of the receiver and not the
- dividend payer
- Industry expects either reduction or abolishment of MAT altogether on the export revenues from SEZs. During Budget 2019, government reduced MAT from 18.5% earlier to 15%.
- Sector is seeking revival of tax holiday for companies that do R&D in niche technologies like AI (Artificial Intelligence), robotics, AR/VR, etc
- Schemes to strengthen farm, health, and pension policies is expected to be on cards this budget
- Increase in FDI in the core insurance sector from 49% to 74% is expected to be proposed for single line insurers after the latest announcements to include life insurers to issue health insurance policies in India.
- Budget announcements may include capital infusion of Rs. 2500 Cr. to improve the operational health and to facilitate the merger process of public general insurance firms.
REAL ESTATE & HOUSING
- The price for affordable housing is capped at Rs. 45 Lakhs. Increasing this limit will help in reviving the pre-sales volume of listed players.
- Increasing allocation of funds for schemes like PMAY (Pradhan Mantri Awas Yojana) for achieving the target of Housing for by 2022.
- The NBFC crisis has hit the sector hard and many developers are unable to raise fresh funds. The Government may look into relaxing the NPA recognition norms for real estate industry. This will help the sector in attracting fresh funds and kick start stalled projects.
- The current tax exemption limit of Rs. 3.5 Lakh for affordable housing should be enhanced to further incentivise the buyers.
- Majority of Bulk Drugs are being imported from China. Suggestion has been to bring down the dependence on imports from China and it should be limited to 50% of the total API (Active Pharmaecutical Ingredient) consumption. In this direction, the Government is requested to incentivise formulators who use local API. Formulators who use API of domestic source with 100% locally manufactured intermediates should be exempted from price control.
- Currently API attracts GST of 18%, whereas, formulation attract GST of 12% which means there is inverted duty structure. This needs to be addressed by reducing API GST to 12% to avoid accumulation of GST credit and putting a strain on working capital.
- Investment based tax incentives can be declared to boost API manufacturing in India. Special zones may be notified for manufacture and export of APIs.
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Karvy Private Wealth is a division of Karvy Stock Broking Limited having SEBI registration No : INZ000172733; NSDL and CDSL â SEBI Registration No: IN-DP-175-2015; PMS Registration No.: INP000001512.